Buy a maternity-linked plan to cover unknown risks

Having a baby entails considerable expense, and having a good maternity insurance cover might help meet these. Unfortunately, there aren’t many standalone maternity covers. They usually come as in-built features within health insurance plans and are designed to provide financial assistance during both normal and caesarean deliveries.

Depending on where you live, the type of hospital and the room category you choose, a normal delivery can cost between Rs 25,000 and Rs 1.5 lakh in a metro city. For a caesarean or cases in which complications arise, costs can go higher.

What is covered: Most maternity plans cover only the maternity event, the child’s delivery, including both normal and caesarean. All plans specify a certain limit up to which the expenses related to maternity are covered. Typically, that ranges from Rs 15,000 to Rs 50,000. Should further complications arise requiring additional hospitalisation or treatment, the overall policy features and coverage come into play.

Hospitalisation charges: Expenditure related to both caesarean and normal delivery are covered. Even if there are complications after the delivery, they get covered.

New-born baby cover: Some insurers provide coverage to the newborn baby as well. Any cost incurred on the baby’s treatment from day one to day 90 is covered. The duration of coverage may vary from one insurer to another.

Vaccination cover: Consider a scenario where a person has bought a health insurance plan that does not include a maternity cover. During the delivery, complications arise and that lead to a far higher degree of risk. In such an eventuality, the mother might have to undergo life-endangering procedures. A normal health insurance plan will not cover those procedures because the initial child-delivery procedure that led to these complications was not covered. Here lies the significance of a maternity-linked cover.

What is not covered?

Like all other health plans, maternity covers also come with a set of exclusions. Pre-and post-hospitalisation expenses and in-vitro fertilisation (IVF) treatment are mostly not covered by these plans. Most maternity covers also don’t start instantly. They typically have a waiting period of nine months to four years. The amount of cover in an in-built maternity plan is also limited, ranging fromRs 20,000-50,000 in most. Given the way health-care expenses are galloping, this might not suffice to take care of all the expenses associated with the delivery.

If you reside in a metro city, you might have to bear Rs 30,000-70,000 for a normal delivery, and Rs 70,000-1.5 lakh for a caesarean one. Prices vary depending on the type of hospital you choose. People buy insurance so, that it covers the expenditure. But if you compare how much is spent as premium versus the benefit one gets in the form of coverage, the picture is not a bright one.

Most insurance companies offer two types of plans — maternity cover as an in-built feature, and those don’t cover the maternity event at all. Premiums for the first type of policy are higher than for the second. The features are not completely similar, making a direct comparison difficult. Broadly, premiums for the two policies differ by 30 per cent or more. If you pay Rs 7,500 for a plan without the maternity benefit, you would pay about Rs 10,000 for one that offers this.

The downside of the plans with the maternity benefit is that you continue to pay a higher premium typically till the age of 40-45, irrespective of whether you utilise it. A rough calculation would suggest that if you hold such a policy till the age of 67 (the average life expectancy in India), you would end up spending Rs 40,000-1 lakh more on a plan with the maternity benefit.

Does that mean you should not buy such a plan? Complications do crop up during the delivery and, hence, it is better to protect yourself against unforeseen events, even if it means paying a few thousand rupees extra in premium each year. However, remember that maternity covers come with a waiting period. If your event is nearby, it makes little sense to buy a health cover with the benefit.

Standalone maternity covers don’t exist. However, Religare Health recently launched two maternity-specific health plans that focus on providing better covers, Joy Today and Joy Tomorrow. These come with shorter waiting periods compared to normal health plans. They are only available till the age of 45. Their major shortcoming, however, is that they offer cover only up to Rs 50,000, while the premium is more than two times a normal health plan offering the maternity benefit. They also take three years’ premium at one shot.